US Farmers Get a Boost From China

US Farmers Get a Boost From China

Trade with China has been a sticking point in US foreign policy for years. Successive administrations have fought – and failed – to stop China from dumping cheap products on us, undercutting American manufacturers and putting their workers on the unemployment line, while hammering US goods with steep tariffs. Now President Trump has managed to reduce tariffs on American cars – and, he says, it’s great news for our farmers too.

Highlights

• Just weeks ago, trade between the US and China looked to be in real trouble. A three-month mini trade war saw both countries slam the other’s goods with billions of dollars in extra tariffs. Now, China seems to have taken a step back, agreeing to slash tariffs on American-made vehicles and a range of other goods.

• According to President Trump, who negotiated the deal with his Chinese counterpart, communist party general secretary Xi Jinping, one place where the benefits will show up fast is in farming. In one of his trademark tweets, sent Monday, the president said “Farmers will be a very BIG and FAST beneficiary of our deal with China. They intend to start purchasing agricultural product immediately. We make the finest and cleanest product in the World, and that is what China wants. Farmers, I LOVE YOU!”

• China has a huge agricultural sector, but it’s notoriously inefficient. A combination of socialist planning and outdated techniques mean that farmland isn’t very productive and wastage is high. China also has a problem with food contamination; processors often bulk out food products with cheap, and sometimes toxic, fillers; deaths from contaminated food are common.

• On the other hand, as President Trump said, the US produces a wide range of high quality food, and our farms are among the most efficient in the world. China has more than a billion people, including a fast-growing middle class, and the potential market for American farm products is huge.

• Up until now, it’s been hard for American farmers to export to China. Heavy tariffs have made their goods uncompetitive, despite their higher quality compared to Chinese-made food. If that’s going to change, demand is likely to be high.

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